The BBA indicated that the number of loans dropped by 8 per cent, to 198,000 approvals in March 2007, but the average home loan approved for house purchase reached £150,800; a rise of 12 per cent from the March 2006 report.
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Remortgage approvals increased 8 per cent in value, but dropped by 6 per cent in number, while equity release approvals also fell 6 per cent by number. However, these also rose in value, by 1 per cent.
David Dooks, director of statistics at the BBA, admitted that market expectation of a further Base Rate rise had made many borrowers reassess their situation. He said: “Strong levels of gross mortgage lending reflect home buyers and owners seeking out fixed rates as protection against rising interest rates. However, in the last two months, net lending has risen sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge.”
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The BBA also revealed that seasonally adjusted consumer credit net lending on personal loans and overdrafts fell by £47 million in March, while credit card borrowing also fell by £117 million.
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